Why foreign companies are shutting shop in China

US-based Seagate, the world s biggest maker of hard disk drives, closed its factory in Suzhou near Shanghai last month with the loss of 2,000 jobs, in a move that has rekindled fears that China is becoming increasingly hostile towards foreign firms operating in the country.

A passionate speech presented by Chinese president Xi Jinping at the World Economic Forum meeting in Davos in early January had been hoped to address the issue, and reassure investors that China s remained open to foreign investment.

Xi defended globalisation and promised improved market access for foreign companies, a positive sign seen by many that China is still sticking firmly to its opening up policies, first rolled out by late leader Deng Xiaoping in the 1980s.

Yet, Seagate joined a spate of foreign companies to shutter operations in China in recent years, for various reasons, but most have attributed the country s high tax regime, rising labour costs and fierce competition from domestic companies.

Panasonic, for instance, stopped all its manufacturing of televisions in the country in 2015 after 37 years of operating in China.

China doesn t need foreign companies so badly now in terms of acquiring advanced technology and capital as in previous years, so of course, the government is likely to gradually phase out more of these preferential policies for foreign firms

Professor Chong Tai-Leung, Chinese University of Hong Kong

When it first opened in 1979, the Japanese home electronics corporation was the country s first foreign firm, tempted by generous benefits not offered to its Chinese competitors, including lower taxes and land prices and easier access to local governments.

But almost four decades down the road, this certainly isn t the case anymore.

In November last year, Japanese electronics conglomerate Sony sold all its shares in Sony Electronics Huanan, a Guangzhou factory that makes consumer electronics, and British high-street retailer Marks Spencer announced it was closing all its China stores amid continuing China losses.

Add to that list Metro AG, Home Depot, Best Buy, Revlon and L Oreal ; and we start to see more than a trend developing.

Once considered Beijing s most-welcomed guests, bringing with them the money, management skills, and technical knowledge that the country so badly needed, foreign companies now appear to have fallen out of favour.

China doesn t need foreign companies so badly now in terms of acquiring advanced technology and capital as in previous years, said Professor Chong Tai-Leung from the Chinese University of Hong Kong, so of course, the government is likely to gradually phase out more of these preferential policies for foreign firms.

Echoing Chong s comments, Shen Danyang, a spokesperson for China s Ministry of Commerce accused some foreign corporates last September of only wanting to make quick money , had become too dependent on preferential government policies in China, and were starting to feel the pain of what he called a deteriorating environment for business in the country.

But for those who had insight and courage , Shen insisted China is still a good place to invest.

We are seeing more Chinese companies becoming champions in other countries, and of course that adds a lot of pressure on foreign corporates

While it s still open to discussion whether those who have now retreated from China lacked insight and courage , there are certainly some common factors emerging on why.

Keith Pogson, a senior partner at Ernst Young who oversees financial services in Asia, said the major one is quite simply fierce competition from Chinese rivals.

We are seeing more Chinese companies becoming champions in other countries, and of course that adds a lot of pressure on foreign corporates. he said, agreeing that the gradual phasing out of preferential policies for foreign firms was certainly in China s self-interest.

Chinese TV brands, for example, for the first time overtook their South Korean rivals last year, ranking first in global sales, with the market share of TCL a household name in the domestic home electronics market increasing more than 50 per cent in Northern American market in the past year.

With the rise of such home-grown firms, the Chinese authorities have been leaning towards their own children , said Pogson, and this gradual phasing out of preferential policies for foreign companies is likely to continue.

Preferential treatment towards foreign firms goes back to 1994 when they were included under the country s general tax regulations.

Until 2007, firms that received foreign investment were subject to 15 per cent income tax while domestic companies paid 33 per cent tax.

But in recent years Beijing has stepped up its efforts to tighten such policies, with the new Enterprise Income Tax Law and Implementation Rules, effective since 2008 unifying the rate for domestic and foreign companies at 25 per cent.

Unclear laws and inconsistent interpretation of them have also been blamed for the flight of some foreign firms.

A survey last year by consulting firm Bain Company and the American Chamber of Commerce in China (AmCham-China) highlighted those were the two top factors hindering foreign firms ability to invest and grow in China.

High labour costs and a lack of qualified employees were also among the top five challenges, the study showed.

An example of the type of regulation that is now hindering foreign progress is the new cyber security law, approved by parliament last November.

It sparked fears that foreign technology firms would be shut out and subjected to contentious requirements for security reviews, and for data to be stored on Chinese servers.

Despite more than 40 international business groups signing a petition to amend some sections of the law, the final draft approved by the parliament remained unchanged a clear indication of Beijing s determination to toughen its stance against foreign firms.

A quarter of the AmCham-China s 532 member firms taking part in the survey said they had either moved or were planning to move operations out of China by the end of last year, with almost half moving to parts of developing Asia .

If more overseas companies want to develop in China at this stage, Chong said, I would suggest they consider second- and third-tier cities.

(The article has been amended to remove Sharp from the list of companies closing their China operations)

Nevada LLC Formation

New Entrepreneurs considering LLC formation in Nevada will be in for a pleasant surprise. An LLC is a bit of a hybrid entity nestled somewhere between a partnership and a corporation. Nevada LLC formation includes the best of the other three business structures (sole-proprietorship, partnership, S- and C- corporations) within a highly flexible, accommodating entity. LLC formation offers the option for having the single-tax, flow-through status enjoyed by partnerships with the added protection of a corporation. This effectively limits a member�s liability through clever, legal tactics.

LLCs may be managed by a Managing-member or a Member-partner. Members partners of LLCs benefit from the same limited liability protection as limited partners in a limited partnership (LP or LLP), but the LLC formation allows for all members to actively engage in managing the company without losing their limited liability status the way managers can in an LP.

LLC formation in Nevada allows members to enjoy the privilege of receiving distributions without regard to investment or capitalization contributions, and without regard to the amount of percent ownership. In other words, owners can receive a distribution in any amount they wish without regard to the amount other owners might receive, and without regard to the percent they own.

Nevada LLC formation also allows for the option to be taxed as a partnership. This eliminates potential double taxation that sometimes occurs with corporations. This is referred to as a flow-through tax election that is combined with the benefits of limited liability protection.

Why Retail Strategies are in Desperate Need of Change

Retail strategy is at a reset moment. Historically, retail CEOs have designed business strategies by creating differentiation among the 8 primary factors of location, store, merchandise/assortment, visual merchandising, staff, service, mass media and communications, and price. A retailer could achieve sustained leadership by standing out in at least 2 of these dimensions.

For example, Walmart’s differentiation is based on broad assortments and low price, or Nordstrom on Service and highly specific assortments.

However, an unprecedented change in consumer technologies, and more so consumer behaviors, has transferred the balance of retail commerce power from retailers to consumers. Consumers are now more connected and informed, and have far more purchase options than ever before. Their personal technologies have changed their behaviors. Consumer expectations have increased, their loyalty has decreased and because barriers to switching brands continue to decline they are in fact switching brands at an accelerated pace.

To respond to consumers’ new behaviors, technologies and purchasing power, retailers must append their business strategy with new forms of differentiation, recognize that customer relationships increasingly influence consumer purchase decisions, understand that mass media communications have given way to consumer preferences for highly personalized messaging, and that business intelligence is a new basis for competitive advantage. My diagram below visually illustrates the adjustments needed for todays successful retail strategy.

While the 8 historical differentiation factors still apply, they are fleeting and insufficient by themselves. They are also being copied and replicated by existing and new competitors in shorter and shorter time spans a trend that will continue to erode differentiation and accelerate commoditization.

The definition of competitive advantage is differentiation that is relevant, measurable and unique. If you recognize that the retail market has changed in a way that none of the original 8 dimensions are unique, you also recognize that they are no longer capable of creating competitive advantage by themselves.

Fortunately, the rise of consumer empowerment also brings new opportunities for retailers. Consumers want to engage with their preferred brands pursuant to their terms and using their personal technologies. Retailers that apply Customer Relationship Management (CRM) strategies to engage consumers and nurture consumer relationships can find that these Customer Relationships trump every other competitive differentiation factor for certain classes of consumers, such as loyalty members, repeat customers and high value customers. Further, customer relationships don’t deteriorate over time. In fact, just the opposite, they normally get stronger over time, making customer relationships one of only two sustainable competitive advantages available to retailers.

The other sustainable competitive advantage is the ability to apply business intelligence for improved decision making throughout the enterprise. Business intelligence is the long heralded but seldom achieved capability to get the right information to the right decision maker at the right time. And for the record, decision makers are not found in just the C-suite. Too often, business intelligence (BI) is narrowly viewed as something for corporate leaders, somehow suggesting the remaining 99% of the business can operate just fine without intelligence.

BI software can use data to create a differentiating customer experience and more accurate merchandise/assortment planning forecasts among other things. However, executive sponsorship is required to create a culture which discourages subjective, gut or intuitive decision making (risk taking) and instead favors data driven, fact based and evidence supported decision making in all areas of the business.

Not Worthless, Just Worth Less

So what about the original 8 competitive advantage factors?

Location and Store. Omni-channel renders any single location and store less potent. More merchandise sold over more channels lessens the volume of business done in any single channel. This doesn’t suggest that the location, store or any single channel is unimportant but that channel diversification renders any single channel less important than the overall omni-channel strategy .

Merchandise and Assortments. These are being copied by high volume imitators and lower cost competitors in shorter durations. For example, shoes, bags, apparel and new fashion trends revealed on Milan runways now have their designs copied and reproduced in hours, and are manufactured in China or Bangladesh in less than four days. However, on the flipside, better data is creating better science to compliment artful assortment planning so that any knowledgeable retailer taking advantage of the science can create improved merchandise and assortment forecasts and plans. Merchandise/assortments is still a critical success factor, but is increasingly replicable by competitors and available to any retailer willing and able to apply data and science to deliver increased accuracy, which thereby renders less differentiation and competitive advantage.

Visual Merchandising. Still important but easily and quickly replicable. Little to no differentiation here.

Staff. While most retailers view staff as expenses and not assets, a few retail leaders are upping their game in terms of staffing – mostly as it relates to their Customer Experience Management goals. Retail staffing as a differentiator varies considerably by sector.

Service. Most retail customer service disappoints but the industry is taking note of the strategies and successes of retailers such as Zappos and Nordstrom. Pre-sale and post-sale service processes are easily and quickly replicable. However, upping the game from simple service scenarios to delivering rewarding and memorable customer experiences (CX) is indeed a strong competitive advantage. For reference, I include CX management within CRM. I know today they are often considered separate, but it’s clear to me they will merge. Understanding this now will help retailers create a single CRM strategy and avoid fragmented processes and systems.

Mass Communications. Mass media branding value and mass communications conversions are dying. I continue to hear retail marketers suggest that mass media creates branding. Unfortunately, they fail to realize that consumers determine the brand value not from paid advertising (which is at an all-time low in terms of believability) but from social media and their own consumer experiences. Retailers must engage consumers via a social media strategy and finely tuned segmentation in order to deliver relevant, personalized and contextual messaging and offers that resonate in order to achieve conversions and campaign effectiveness. This is a big transition that most retailers make at a snails pace.

Price. Unless you are Walmart, competing on price remains a fools errand.

The unprecedented pace of change in the retail industry is producing a growing divide between those that act and those that wait and see. As innovative retailers respond to more demanding consumer behaviors they will in turn attract larger numbers of new customers while those retailers who procrastinate will involuntarily become the source of those customer defections and incur a steady business deterioration.

Why sporting goods retailers are fumbling

In sports, it’s an asset if you can play multiple positions.

If you’re a sporting goods retailer, trying to do it all often ends in defeat.

Sport Chalet learned that the hard way, abruptly announcing Saturday that it was closing all of its 47 stores. The La Ca ada Flintridge-based chain spent years battling financial troubles and struggled to keep pace with changing consumer tastes that made for exceptionally fierce competition even by retail standards.

A perennial money-loser for nearly the last decade, Sport Chalet was in business 57 years but couldn’t withstand pressures now coming from all sides: larger sporting goods rivals, big-box discounters, online retailers and specialty high-end brands all ate into the company’s market share.

Sport Chalet had a humble start

Sport Chalet got its start in 1959 when German immigrants Norbert and Irene Olberz bought a tiny ski and tennis shop in La Cañada Flintridge for $4,000.

During the company’s first two years, the couple worked and lived in the store, sleeping on rollaway beds and showering with a garden hose. In.

Sport Chalet got its start in 1959 when German immigrants Norbert and Irene Olberz bought a tiny ski and tennis shop in La Cañada Flintridge for $4,000.

During the company’s first two years, the couple worked and lived in the store, sleeping on rollaway beds and showering with a garden hose. In.

As Americans become more health conscious and fitness focused, the sporting goods industry has grown steadily but also become increasingly specialized. If you want stylish $50 sports bras and $100 yoga pants, you go to Lululemon. Discount sporting equipment? Big 5. Top-notch customer service? REI. Cheap and casual workout clothes with a side of laundry detergent or toilet paper? Target or Wal-Mart will do.

Even mall staples such as Forever 21 and Gap have aggressively expanded their active wear offerings in recent years as they try to capitalize on the so-called athleisure market.

That left little room for Sport Chalet and similar chains. Its parent company, Vestis Retail Group, said Monday that it filed for Chapter 11 bankruptcy protection. Vestis also owns Eastern Mountain Sports and the apparel retailer Bob’s Stores.

The big problem was that they weren’t focused on anything enough to carve a niche in the market, said Rory Masterson, industry analyst at IBISWorld.

Vestis’ brands aren’t the only sporting goods retailers to bow to those pressures. The much larger Sports Authority chain filed for bankruptcy protection last month, with plans to close 140 of its 463 stores nationwide and in Puerto Rico.

The U.S. sporting goods market totaled $63.7 billion in sales in 2014, the most recent year for which figures were available, according to the National Sporting Goods Assn. trade group. That was up 24% from 2009. Sporting goods retailers, excluding the mass merchandisers, employ nearly 315,000 people nationwide at 45,770 locations, according to the research firm IBISWorld.

Sporting goods’ total sales

About 1,200 jobs at Sport Chalet are now at risk with the chain’s closing.

Analysts said there were parallels between Sport Chalet and its beleaguered rival Sports Authority, including that both were saddled with debt after being acquired by other firms.

If a retailer’s got a lot of debt, it means they’re not spending money on stores, they’re not spending money on systems, they’re not spending money on the kinds of things they need to do to drive the business forward, said Matt Powell, an industry analyst at market research firm NPD Group.

Although Sport Chalet once marketed itself as being staffed by the experts, that customer help for specific activities has been matched by several of its rivals, Masterson said. And outdoor blogs and online reviews have also made in-store specialists less of a selling point.

Sport Chalet was known for catering to enthusiasts in winter sports, diving, marathon running and hiking, but ultimately it wasn’t enough.

In its fiscal year ended March 30, 2014, its last as a public company, Sport Chalet lost $10 million on sales of $344 million. Dick’s, with 645 stores, had sales of $7.3 billion in its fiscal year ended Jan. 30.

Dick’s and other industry leaders such as REI and Cabela’s Inc. also established stronger relationships with suppliers and developed the kind of leverage on the supply side that smaller operators like Sport Chalet were unable to match, Masterson said.

Those retailers were also ahead of the curve when it came to building an online presence, which put Sport Chalet at a disadvantage, he said.

Dick’s Chairman Edward Stack, who referred to the unique time in his industry during a conference last month, said Dick’s online sales jumped at a compounded annual rate of 39% from 2010 through 2015.

These smaller operators are kind of unable to keep up just because they don’t have the resources to be able to keep up, Masterson said.

The athleisure market for casual athletic clothing, which took off a few years ago, also has become increasingly crowded with big-box retailers such as Wal-Mart and Target, as well as fast-fashion brands joining the fray often at cheaper prices.

People are seeking out apparel and footwear as much for fashion as for actual activities, said Joseph Feldman, an industry analyst at Telsey Advisory Group.

That trend also isn’t showing signs of slowing down, said Diana Smith, senior research analyst for retail and apparel at the research firm Mintel Group Ltd.

All of that competition from a number of different retailers is putting pressure on the sporting goods stores, she said.

The consumer is smart enough to be able to shop around and know they can get some pretty quality athleisure [items] and they’re not confined to a sporting goods store, Smith said.

That’s a challenge for every sporting goods chain, including El Segundo-based Big 5 Sporting Goods Corp. which has 438 stores. Big 5 remained profitable last year, earning $15.3 million on sales of $1 billion.

But in its annual report filed with regulators last month, Big 5 noted that e-commerce has been a rapidly growing sales channel, particularly with younger consumers, and that if the chain was unable to compete successfully in online sales our operating results may suffer.

Why Retail is a Smart Career Choice

Home Why Retail? Why Retail is a Smart Career Choice

There are many positive benefits to be gained from a career in retail. Retail jobs provide varied and challenging work and the chance to learn valuable skills. If you have ever thought about going into a retail career, then you are considering one of the most under-estimated employment choices out there!

The retail industry offers.

Variety

With a variety of occupations, career streams (buying, visual merchandising, marketing, finance, e-commerce and human resources) and retail industry sectors to choose from there are a multitude of opportunities. It’s also an industry where you can start at the bottom and work your way up to the top.

Retail Is Everywhere

The number of retailers keeps on growing and diversifying, for example the growth in retailers who are trading online. Therefore, if you’re just starting out, you can be sure that the career opportunities and benefits will be set to grow even further in the future – everyone needs to shop!

Flexibility

There are not many industries that can offer you the same degree of flexibility as retail. For many people, especially those with family commitments, the retail sector is an ideal environment in which to work because of the flexibility of the hours and shift patterns. This means you can still be employed and earning an income whilst also being able to attend to other commitments you might have.

Job Benefits

Retail offers benefits that an office job doesn’t, providing an interesting lifestyle and an exciting and varied career path. You can choose to work in a sector of retail that suits your personality, hobbies and interests and potential receive staff discounts on products you’d like to buy! Most importantly many of the skills acquired form working in retail will be beneficial to your future employment and many aspects of your personal life.

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Why would I want to work in Retail?

The retail industry employs around 2.9m people in the UK and generates over 260bn a year in sales larger than the combined economies of Portugal and Denmark.

By its very nature retail is a fast-moving industry as organisations try to respond to – and predict – customer demand and future trends. But if you think that a career in retail is limited solely to the shop floor, think again.

From sourcing new producers to transporting goods, ordering stock and forecasting trends, there are a multitude of roles that are critical to the retail operation that you may never have even realised.

And these roles can also be found in a number of associated sectors, from warehousing and distribution to finance, marketing and design.

Here are a few examples of jobs from across the retail spectrum:

Merchandiser – Forecasting trends and budgeting

Store Manager – Running an outlet and meeting targets

Visual Merchandiser – Designing product displays

Logistics Manager – Distributing and storing products

Market Researcher – Analysing consumer behaviour

Buyer – Finding new products and anticipating demand

PR Marketing – Promotion of brands to consumers

Design – Creating and developing new products and packaging

There are many opportunities to move between each of these disciplines if you feel you d like to move your career in a different direction.

As many departments work closely together of projects, it s likely that you will pick up a diverse range of skills in various business disciplines without you even realising.

One of the other benefits of retail is the flexible working hours and Retail Sales Assistants account for 13% of all part-time positions in the UK.

In an age when consumers demand access to goods and services 24/7, retail workers are needed to man the shop around the clock meaning there are many opportunities to fit your working hours around your personal and family commitments.

The retail industry has plenty of variety not least because of the vast array of products in the marketplace.

In both traditional retail stores and in new online markets, there really are limitless opportunities for people to work within a sector that interests them regardless of whether you are a petrol-head or fashion lover.

You may also want to read

Find a Job

Monster was one of the first commercial websites within its area and is recognised for its job search as being a pioneer of online recruitment. On our job board, you will find countless job listings from top employers in the United Kingdom. To find top results, search for keywords, job titles, and locations and you will be presented with a list of job offerings. If you are unsure of what to look for, browse our job site to find inspiration. We wish you all the best for your job search applications and on your career path and hope you will find a new opportunity through Monster.co.uk.

Why do you want to work for us and not for one of our competitors?

There are many job opportunities in retail. If you apply for a job in one of the big companies, like Target, K-Mart or Walmart, they will always ask you about the reason for your preferences.

It is obvious that job seekers submit their applications to as many companies as possible. to improve their chances of getting some job at the end. However recruiters should not get the feeling that it is just another job interview for you. You should try to make them feeling exceptional. or at least convince them that it goes about your most favorite retailer .

You should focus on the following things in your answer:

Your personal preferences. Do you shop there? Does your family shop there? Why do you prefer them?

Vision and branding of the company. What makes this retailer unique? Why should people go there? Why would you be proud to work for them and not for another company?

Location. Is it close to your apartment? It is located in an easily accessible area for you?

All these reasons are pretty good for your answer.

Sample answers

I typically shop here. I really like the way the staff approaches customers, as well as the working conditions, at least based on my observations. I think the working environment here is better than at other big retailers in our city and that is the reason for my preferences.

This is the most popular retail brand in the United States. You do your best to offer wide range of products for the poorest groups of society and actually it would make me proud to be employed here.

My preference is location based. I typically shop here on my own. It is just ten minutes walk from my apartment. Therefor, it will be very convenient for me to have this job. On the top of that, if I needed to replace someone sick or come to work in an unexpected time, it wouldn t be a problem. Manager can simply call me and I can be in work in ten minutes. So, to be employed here would be good for both me and the company I believe.

Interested in making and/or selling baby products online? Prepare to join a very large club: It’s estimated that by 2018 there will be more than 6,000 companies looking to sell products via e-tail in this “niche” market .

Arriving fashionably late, however, just might work to your advantage, particularly if you are focused more on the making than the e-tailing. “When we started looking at the juvenile space, one of the things we liked was how crowded it was,” says Rob Daley, co-founder of 4Moms, a Pittsburgh company that makes innovative baby products and surpassed $30 million in sales last year.

Daley says that, had there been only one or two companies in the space, those companies would have had substantial clout with retailers, who would probably be comfortable and happy working with a small number of suppliers. Instead, he says, the intense fragmentation leaves retailers open to working with many companies. “If you have an idea for something that is really differentiated,” Daley says, “the roadblocks are not quite as high.”

That’s not to say that it’s easy. “All retailers are scared because of Amazon and eBay,” says Linda Bustos, the director of ecommerce research for Elastic Path Software, which makes ecommerce software. “They are covering the entire long tail and seem to have every niche covered.”

That leaves you with two ways to stand out: via the products you sell or the online retail experience you’re able to offer customers.

Keep Innovating

While it may seem that new baby products are springing up everywhere, Daley believes that few of them actually offer new features or benefits that customers care about. “There’s a low level of innovation in the industry, historically,” he says. Some companies have built powerful brands by selling cachet, or by more sophisticated design, but the products’ functionality hasn’t changed much.

Graco’s Pack-n-Play, Daley says, was developed off a key patent the company won in 1987. In the early 2000’s, that product still had an 85 percent market share. “Either the product is perfect,” says Daley, “or there’s a good opportunity to make it better, because it hasn’t changed in decades.”

Daley and co-founder Henry Thorne, a veteran roboticist, thought it was more likely that there was room to make better products. 4Moms now sells a baby bathtub that incorporates a digital thermometer and lets dirty water drain out, so baby isn’t left soaking in soap scum. Its “Origami” stroller unfolds with the push of a button and comes equipped with running lights and an iPhone charger.

Your idea doesn’t have to be all about tech, however. When Rebecca Cannon started her company, Asheville, North Carolina-based iPlay, she was importing diaper covers from Japan that fastened with Velcro. She expanded into selling cotton baby clothes, which at the time were hard to find.

Today Cannon employs 62 people and has annual revenues of more than $10 million. iPlay sells through its own web site, as well as at Whole Foods, Amazon, Buy Buy Baby, and Target.

While there are plenty of web sites selling all-natural baby everything, Cannon is still innovating. Her newest product, which is currently being reviewed by buyers at Whole Foods, is a kit that allows parents to make all-natural homemade baby food. Parents supply the fresh fruits and vegetables, and iPlay’s kit provides fortifying ingredients such as sprouted grains, beans, oils, essential fatty acids, probiotic powders, and sea salts. “It probably won’t sell as well as the pouches or pur ed baby foods, but I think this is the healthiest thing,” says Cannon.

Know Your Shopper

Andy Hoar, a senior analyst with Forrester Research, has some advice for those who hope to compete on the basis of an improved online shopping experience.

First off, says Hoar, you cannot do anything that requires people to change their behavior. It’s just too much. In a somewhat different sphere, he cites Shopkick, a phone-based loyalty and rewards app. To get your loyalty points, you had to first download the app. When you entered a store that worked with Shopkick, you had to turn on the app. Then, and only then, could you scan bar codes to earn points. “A busy mom with kids is not going to open the Shopkick app,” he says. Now, Shopkick’s figured out how to make its app awaken the minute you walk into one of its retailers, and Hoar says that’s made all the difference.

Second, you’ve got to add value. This sounds basic, but it’s amazing how few sites do it. It’s not just about competing on price. Instead, you can combine a recommendation engine with your own knowledge of what a customer has bought from you before. Smart curation helps too. As Bustos points out, customers who know what they want can easily buy it from Amazon or eBay. Your task is to show them what they didn’t know they want, just the way a fantastic off-line retailer does.

Last, think about products that lend themselves to demonstrations. In stores, complicated products are often trapped in boxes, where they’re rarely even assembled. Online, you can demonstrate exactly how something works, solicit reviews from customers, and provide a whole range of content that helps consumers make the educated decision: to buy from you.

Why Branding Is Important When It Comes to Marketing

Updated July 02, 2016

Branding can be in a name, slogan, sign, symbol or design, or a combination of these elements that identify products or services of a company. These elements differentiate the goods and or service from the competition.

What Should a Brand Do?

Branding is not only about getting your target market to select you over the competition, but about getting your prospects to see you as the sole provider of a solution to their problem or need.

Branding and Understanding Your Customer

To succeed in branding. you must understand the needs and wants of your customers and prospects. This is achieved by integrating your brand strategies through your company at every point of public contact. Think of branding as the expression of who you are as a company or organization and what you offer. Sound difficult? Think of it like this if a brand could speak it would say:

I am ________________.

I exist because ________________.

If you relate to who I am and why I exist you might like me, you can buy me and you can tell others about me.

As consumers begin to identify with you, your brand will live within the hearts and minds of customers, clients, and prospects.

It is the sum total of their experiences and perceptions, some of which you can influence, and some that you cannot.

The Importance of Branding

A strong brand is invaluable as the battle for customers intensifies day by day. It s important to spend time investing in researching, defining, and building your brand.

After all, your brand is the source of a promise to your consumer.

Brand is a foundational piece in your marketing communication and one you do not want to be without. Brand is strategic and marketing is tactical and what you use to get your brand in front of consumers. That s why it carries a great deal of importance within a business or organization as well.

Brand serves as a guide to understanding the purpose of business objectives. It enables you to align a marketing plan with those objectives and fulfill the overarching strategy.

The effectiveness of brand doesn t just happen before the purchase, but it s also about the life of the brand of the experience it gives a consumer. Did the product or service perform as expected? Was the quality as good as promised or better? How was the service experience? If you can get positive answers to these questions you ve created a loyal customer.

Brand not only creates loyal customers. but it creates loyal employees. Brand gives them something to believe in, something to stand behind.

It helps them understand the purpose of the organization or the business.

When everything is available for sale on your smartphone, why do catalogs still clutter your mailbox?

The old-school marketing format has survived to play a crucial creative role in modern e-commerce. Today, the catalog is bait for customers, like a store window display, and a source of inspiration, the way roaming through store aisles can be. The hope is shoppers will mark pages they like and then head online, or into a store, to buy.

Today’s catalogs are no longer phone-book-size compilations of every item a retailer sells. Instead, they have fewer pages and merchandise descriptions, and more and bigger photos and lifestyle images.

For retailers, creating the inspiration comes with hefty costs, including expensive photo shoots and rising postage rates. And with catalogs produced many months in advance, they lock retailers into specific trends and merchandise, unlike digital marketing pieces that can be updated in minutes.

Even so, the potential for boosting sales has brought new interest in print catalogs. Some retailers founded primarily online are entering the fray, including Bonobos, the menswear brand built on the idea of better-fitting pants. And many traditional store retailers with a history of catalogs remain as committed as ever.

Devon Jarvis for The Wall Street Journal

It’s still a very, very important part of our marketing mix, says Pat Connolly, chief marketing officer at Williams-Sonoma Inc. parent company to seven brands with catalogs including Pottery Barn and West Elm. Consumers look through it to get ideas and inspiration. And if we do a good job, they get ideas for things they didn’t even know they wanted before they got there.

Williams-Sonoma maintains a database of 2,000 privately owned houses that serve as locations for catalog photo shoots. More than half the company’s marketing budget goes to catalog production and mailing.

Marketers mailed 11.9 billion catalogs in 2013, according to the Direct Marketing Association, marking the first uptick in years. Total catalog circulation is still far below the 2007 peak of 19.6 billion. The 2008 recession forced catalog companies to cut dead wood out of their mailing lists and get smarter about how and when they mail.

Bonobos mailed a test catalog just over a year ago to a small number of current and potential customers. Results prompted the brand to try several more, gradually increasing circulation each time. Now, some 20% of the website’s first-time customers are placing their order after having received a catalog, says Craig Elbert, vice president of marketing for Bonobos. They spend 1.5 times as much as new shoppers who didn’t receive a catalog first.

Online tools to attract new customers, like display ads and emails, often have just one image or text line. A catalog gives us a bit more breathing room to grab folks’ attention, Mr. Elbert says. We’re able to tell a bit of a fuller brand story.

The retailer has studied catalog responses to understand sales patterns, such as what was driving strong sales of casual shirts. Its first catalog, in March 2013, featured a model wearing a blue-and-green checked shirt with white jeans. Many men ordered both. As a result, the brand now routinely emphasizes full-outfit shots.

Catalogs require months of advance planning and production, presenting seasonal challenges for Athleta, a division of Gap Inc. The athletic-wear brand’s catalogs feature action shots of models wearing the clothes and using the gear. Finding the right setting is essential—and difficult, when the winter catalog must be shot in July.

It’s easy to fake out a yoga studio so it looks like winter, says Tess Roering, Athleta vice president of creative and marketing. But for skiing, she says, we need to go to places that have real snow. The Athleta team is set to travel to New Zealand in a few months.

Long catalog lead times lock brands into specific products. After Athleta featured blue-and-yellow running tights on its April catalog cover, the tights arrived in stores 10 days late. Catalogs sent shoppers to stores for a product that wasn’t there.

It’s disappointing, Ms. Roering says. Once the tights were in stock, they sold well, she says.

Many retailers can pinpoint exactly when their catalogs land in mailboxes because of a spike in activity in stores and online. We see an immediate sales lift, says John Koryl, president of stores and online at Neiman Marcus. The catalog’s halo effect reaches beyond the contents of the book to the brand’s broader offerings.

Shoppers may not buy what’s on the cover of the catalog. They may not even buy in the category that the catalog covered, Mr. Koryl says. But it is this inspirational moment to remind them to shop.

The average catalog costs much less than a dollar to produce, including printing, mailing, the purchase of new addresses and fees for an outside mailing house or project management, says Polly Wong, managing partner for strategic e-commerce and creative services at Belardi/Ostroy, a retail marketing consulting firm. Response rates and order sizes run the gamut, but typically each catalog mailed results in about $4 in sales, she says.

Breegan Harper, a 22-year-old recruiter who lives in Seattle, gets catalogs including from Anthropologie and J. Crew and browses them while watching television. I can pick up a magazine or I can pick up a catalog, because they are going to both have fashion in them, she says. Rather than toss catalogs directly into the recycling bin, Ms. Harper and her five roommates often hold on to them. We have them out on our coffee table, she says. The cutest ones go in the living room.

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Boden, the U.K.-based clothing retailer, ships millions of catalogs around the world each year. Shoppers spend up to 15 to 20 minutes with the catalog, says Shanie Cunningham, head of U.S. marketing, compared with an average of just eight seconds for a Boden email and about five minutes with the Boden iPad app.

To encourage shoppers to spend even more time, Boden adds content to its catalogs, such as a pithy Q-and-A with its models. Some of its recent children’s catalogs include a page of stickers; other catalogs have had sticky tabs that can mark pages with sayings like Must Have or I Need This Now.

More catalogs are tailored for individuals, meaning the one you get could look very unlike the one your next-door neighbor gets. We definitely are targeting and personalizing, says Ms. Cunningham. Boden will change the theme, the size of the book and even the discount it offers to the same address. A recent catalog offered one spouse 15% off and the other just 11% off.

L.L.Bean is playing with the page count of catalogs it sends to regular website shoppers, says Steve Fuller, chief marketing officer at the outdoor and apparel retailer. Many of its catalogs come in different versions. So instead of sending every customer the largest book, Mr. Fuller looks for frequent website visitors and asks, Can I only send her 50 pages, or 20, as a reminder of, ‘Oh, I’ve got to go to the website’?